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CANADA FX DEBT-Canadian dollar dips as investors eye global economic slowdown

* Canadian dollar dips 0.1% against the greenback * Flash estimate shows factory sales falling 2.5% in May * Price of U.S. oil rises 0.2% * 10-year yield falls to lowest in nearly two weeks TORONTO, June 23 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Thursday as investors weighed the risk of a global economic slowdown and preliminary domestic data showed factory sales falling in May. The loonie was down 0.1% at 1.2956 to the greenback, or 77.18 U.S. cents, after trading in a range of 1.2937 to 1.2987. Purchasing managers' data showed a loss of economic momentum in some major European economies. Investors are concerned that interest rate increases to quell decades-high inflation will tip economies into recession. The price of oil, one of Canada's major exports, edged higher after earlier falls as investors weighed the risks of recession and how fuel demand will be affected by rising interest rates and tight supplies. U.S. crude prices were up 0.2% at $106.35 a barrel. Canadian factory sales fell 2.5% in May from April, largely driven by lower sales in the motor vehicle and primary metal industries, Statistics Canada said in a flash estimate. A preliminary estimate for wholesale trade was more upbeat, showing a 2.0% increase in May. Money markets expect the Bank of Canada to raise interest rates by three quarters of a percentage point next month after data on Wednesday showed inflation jumping to its highest in nearly four decades. The central bank has come under a rare attack from critics after misjudging inflation and locking itself into rigid forward guidance that prevented it from reacting swiftly as prices surged and Canada's economy began to overheat. Canadian government bond yields were lower across the curve, tracking the move in U.S. Treasuries. The 10-year eased 12.2 basis points to 3.299%, its lowest level since June 10. The Bank of Canada is due to auction 10-year bonds on behalf of the Government of Canada, with the bidding deadline at 12 p.m. ET (1600 GMT). (Reporting by Fergal Smith Editing by Mark Heinrich)